Monday, October 15, 2007
360Meet.com
First entry into the TeeThree portfolio has made an appearance at 360Meet.com
360Meet.com will be a social networking website of it's kind and will be the first one to debut from the particular region.
Currently in it's development state and in the mean while we are collecting the user interests in the form of their contact information at http://www.360meet.com. Once the 360Meet.com will enter his BETA stage, these people will be the first one to test it out.
Regards,
Waqas Ahmed
http://www.teethree.com
Tuesday, October 9, 2007
7 Steps to Mission-Critical - Step 1: Don’t assume. Assess.
CIOs today are being called upon to interpret business strategy and priorities, then add value through information technology initiatives. At a time when “critical to the business” translates to “mission-critical IT,” how do you ensure end-to-end availability and reliability of the IT resources that enable your company’s essential business processes?
This series comes to you from Stratus Technologies, a leader in mission-critical availability for more than 25 years.
Step 1: Don’t assume. Assess.
At the same time expectations for service delivery are rising, CIOs are taking steps to bring IT into closer alignment with the business. And the more intrinsic IT applications and services become to business processes, the more they becomemission-critical.
These increasing demands mean it’s probably time to reassess your mission-critical environment against the job you are being asked to do.
For example, tougher mandates for information security and regulatory compliance require complete,auditable data. Not to mention that more users, more customers and more partners are probably counting on your IT services. If so, every hour of downtime will cost your company
more.
Maximizing the end-to-end availability of your mission-critical environment involves more than technology, of course. Procedures, policies and how people carry them out every day are vital. The same goes for security measures. It is important to understand the state of these elements and the dependencies between them. An up-to-date audit of your IT environment provides a baseline for staying in step with business needs.
Even when you believe your IT infrastructure is delivering optimal availability, a review can reveal new or overlooked information. Perhaps incremental changes such as software patches have introduced risk factors that have escaped notice. An assessment can also show whether previous efforts were as successful as they could be.
Waqas Ahmed
http://www.teethree.com
Outsourcing's Advantages
Outsourcing offers businesses the opportunity to cut costs and boost productivity -- if it's done right.
Offshore locations feature low-cost workers who can cut your labor costs by 50% or more. Tapping workers in India or China also affords the possibility of round-the-clock technical or customer support -- when domestic staffers sign off in the evening, their Asian counterparts are just waking up. Companies can also transform labor costs from fixed to variable by working with an outsourcer. Need extra manpower during the holidays? A service provider can put more bodies on your account during crunch times. Finally, outsourcers can provide quick access to domain and technology experts who may be in short supply locally.
Despite these advantages, reports abound about outsourcing gone bad. Dell infamously had to repatriate some customer service operations after customers complained they couldn't understand foreign phone reps. The bottom line: Outsourcing isn't about blindly throwing work over the wall; it needs to be thought out and aggressively managed. Here are some pitfalls to watch for, and how to cope.
Many outsourcing projects fail because of lack of internal oversight. Forrester analyst Christine Ferussi Ross says businesses should establish formal vendor management offices staffed with professionals experienced in IT operations, contract negotiations, and procurement. Also needed is an individual with the diplomatic skills necessary to maintain vendor relationships over time. "Outsourcing implies some give and take," says Ross.
Only 47% of 615 companies recently surveyed by Forrester reported having a centralized vendor management office.
Costs also need to be managed, or potential savings can evaporate quickly. Of concern lately for those outsourcing to India is the rising rupee, which has gained about 14% against the U.S. dollar over the past year. Businesses need to negotiate up front the extent to which their vendor is willing to insulate them from currency fluctuations. Labor costs in India are also rising -- by as much as 15% per year -- so companies interested in outsourcing for the first time might do well to scout out locations that haven't been oversold, such as South America and China, and even second-tier cities in India. Not everything needs to be in Bangalore.
Deciding what to outsource is almost as critical as the decision to outsource itself. Not all IT projects or customer groups are created equally. Outsourcing the development of non-critical applications or customer service for low-revenue customers are good places to start. Dell's mistake was offshoring service and support for its high-end business customers.
Regardless of what you outsource, the security of your company's and your customers' personal and business data must be a top consideration. When weighing vendors, it's worth a trip to their facilities to inspect first-hand their security technologies and policies, even if that means a long flight. Most major offshore outsourcers, including India's big four of Wipro, TCS, Infosys, and Satyam, have sophisticated security processes in place. Even so, it must be negotiated up front who is responsible for what if a breach occurs.
Outsourcing needn't be fraught with peril, but it does need to be well managed.
Waqas Ahmed
http://www.teethree.com
Offshore locations feature low-cost workers who can cut your labor costs by 50% or more. Tapping workers in India or China also affords the possibility of round-the-clock technical or customer support -- when domestic staffers sign off in the evening, their Asian counterparts are just waking up. Companies can also transform labor costs from fixed to variable by working with an outsourcer. Need extra manpower during the holidays? A service provider can put more bodies on your account during crunch times. Finally, outsourcers can provide quick access to domain and technology experts who may be in short supply locally.
Despite these advantages, reports abound about outsourcing gone bad. Dell infamously had to repatriate some customer service operations after customers complained they couldn't understand foreign phone reps. The bottom line: Outsourcing isn't about blindly throwing work over the wall; it needs to be thought out and aggressively managed. Here are some pitfalls to watch for, and how to cope.
Many outsourcing projects fail because of lack of internal oversight. Forrester analyst Christine Ferussi Ross says businesses should establish formal vendor management offices staffed with professionals experienced in IT operations, contract negotiations, and procurement. Also needed is an individual with the diplomatic skills necessary to maintain vendor relationships over time. "Outsourcing implies some give and take," says Ross.
Only 47% of 615 companies recently surveyed by Forrester reported having a centralized vendor management office.
Costs also need to be managed, or potential savings can evaporate quickly. Of concern lately for those outsourcing to India is the rising rupee, which has gained about 14% against the U.S. dollar over the past year. Businesses need to negotiate up front the extent to which their vendor is willing to insulate them from currency fluctuations. Labor costs in India are also rising -- by as much as 15% per year -- so companies interested in outsourcing for the first time might do well to scout out locations that haven't been oversold, such as South America and China, and even second-tier cities in India. Not everything needs to be in Bangalore.
Deciding what to outsource is almost as critical as the decision to outsource itself. Not all IT projects or customer groups are created equally. Outsourcing the development of non-critical applications or customer service for low-revenue customers are good places to start. Dell's mistake was offshoring service and support for its high-end business customers.
Regardless of what you outsource, the security of your company's and your customers' personal and business data must be a top consideration. When weighing vendors, it's worth a trip to their facilities to inspect first-hand their security technologies and policies, even if that means a long flight. Most major offshore outsourcers, including India's big four of Wipro, TCS, Infosys, and Satyam, have sophisticated security processes in place. Even so, it must be negotiated up front who is responsible for what if a breach occurs.
Outsourcing needn't be fraught with peril, but it does need to be well managed.
Waqas Ahmed
http://www.teethree.com
Global IT Spending To Reach $1.48 Trillion In 2010
Global IT spending is projected to increase at a compound annual growth rate of 6.3% to reach $1.48 trillion in 2010.
Broken down by segment, worldwide software spending is expected to reach $327 billion in three years, reflecting a compound annual growth rate of 7.7%. The hardware market is projected to reach $562 billion by 2010, driven mainly by "robust" spending from the home business and consumer, communications, and government sectors. Specifically, more money spent on volume servers, peripherals, storage, and networking equipment worldwide.
Companies also are expected to increase spending on IT services at a compound annual growth rate of 5.8% to reach $587 billion at the end of the decade. Sectors expected to have the highest demand are government, banking, and discrete manufacturing.
The spending projections are contained in a study called Worldwide IT Spending, 2006-2010 Forecast Update by Vertical Market: North America, West Europe, Asia Pacific, and Rest of the World.
Waqas Ahmed
http://www.teethree.com
Broken down by segment, worldwide software spending is expected to reach $327 billion in three years, reflecting a compound annual growth rate of 7.7%. The hardware market is projected to reach $562 billion by 2010, driven mainly by "robust" spending from the home business and consumer, communications, and government sectors. Specifically, more money spent on volume servers, peripherals, storage, and networking equipment worldwide.
Companies also are expected to increase spending on IT services at a compound annual growth rate of 5.8% to reach $587 billion at the end of the decade. Sectors expected to have the highest demand are government, banking, and discrete manufacturing.
The spending projections are contained in a study called Worldwide IT Spending, 2006-2010 Forecast Update by Vertical Market: North America, West Europe, Asia Pacific, and Rest of the World.
Waqas Ahmed
http://www.teethree.com
Here's What Microsoft Could Do With Facebook
Microsoft's reportedly in talks to invest somewhere between $300 and $500 million for a stake in Facebook. Here's what Microsoft could do with it.
Create interoperable ties between Facebook and Windows Live Spaces or even SharePoint. Open social networks may be the future, and Microsoft doesn't seem to be getting much if any traction with Windows Live Spaces just yet. Why not give it a boost by opening Live Spaces users up to a huge group of people with whom to connect?
Keep a close eye on a potentially scrappy competitor. Facebook certainly is trendy these days, and Microsoft would clearly like a piece of that, whether the investment potential is real or not. I'm not saying Facebook is anything more than a competitive rounding error to Microsoft right now, but by moving some Redmond spies down to Facebook's Palo Alto office, Microsoft will be better able to understand and dissect the Facebook phenomenon and stalk talent.
Sit on it and block other competitors. Yahoo offered Facebook $1 billion a while ago, and Google also is rumored to be a suitor. These are Microsoft's real online competitors, and a Facebook investment could be a preemptive move by Microsoft just to keep its competitors grimy little hands off.
- Create Microsoft applications to run on Facebook's F8 platform. Live Messenger for Facebook?
Secure Facebook as an advertising customer. Forever. Microsoft already has a deal to syndicate ads at Facebook through 2009. Turning Facebook into Facebo-soft should get the company some additional advertising perks, like locking in Facebook's millions of users as advertising customers in perpetuity.
Anything else?
Waqas Ahmed
http://www.teethree.com
Microsoft's Explorer Update Ditches Windows Genuine Advantage
Microsoft has released an updated version of Internet Explorer 7 that dispenses with a cumbersome security feature designed to ensure users are running the Web browser atop legitimate copies of the Windows operating system.
In a note posted Thursday on the Explorer development team blog, Microsoft programmers said the decision to drop Windows Genuine Advantage, as the security feature is known, from Explorer was made to promote the browser to a wider audience.
"We're updating the IE 7 installation experience to make it available as broadly as possible to all Windows users," said Explorer program manager Steve Reynolds in a blog post.
Flaws in Windows Genuine Advantage have reportedly resulted in millions of Windows users erroneously being reported to Microsoft as software pirates. A Chinese student has gone so far as to sue Microsoft over the issue.
The update, available as a download, also includes a number of other enhancements to Internet Explorer 7. The menu bar is now visible by default, the online help section has been enhanced, and a new tool is included to help IT administrators in large enterprises deploy the browser.
Microsoft is clearly hoping the update will boost adoption of IE 7, which debuted last year for Windows XP and was updated in January for Windows Vista. Despite the releases, Explorer's market share has declined slightly over the past year as competition emerges from Firefox, Safari, Opera, and other alternative browsers.
Explorer's market share fell from 81.3% of the market in October 2006 to 77.9% in September 2007, according to market watchers at Net Applications.
Waqas Ahmed
http://www.teethree.com
In a note posted Thursday on the Explorer development team blog, Microsoft programmers said the decision to drop Windows Genuine Advantage, as the security feature is known, from Explorer was made to promote the browser to a wider audience.
"We're updating the IE 7 installation experience to make it available as broadly as possible to all Windows users," said Explorer program manager Steve Reynolds in a blog post.
Flaws in Windows Genuine Advantage have reportedly resulted in millions of Windows users erroneously being reported to Microsoft as software pirates. A Chinese student has gone so far as to sue Microsoft over the issue.
The update, available as a download, also includes a number of other enhancements to Internet Explorer 7. The menu bar is now visible by default, the online help section has been enhanced, and a new tool is included to help IT administrators in large enterprises deploy the browser.
Microsoft is clearly hoping the update will boost adoption of IE 7, which debuted last year for Windows XP and was updated in January for Windows Vista. Despite the releases, Explorer's market share has declined slightly over the past year as competition emerges from Firefox, Safari, Opera, and other alternative browsers.
Explorer's market share fell from 81.3% of the market in October 2006 to 77.9% in September 2007, according to market watchers at Net Applications.
Waqas Ahmed
http://www.teethree.com
Microsoft Wants Red Hat Users To Pay
Microsoft CEO Steve Ballmer said his company expects payment from computer users who run Red Hat Linux because the open source operating system violates Microsoft's intellectual property rights.
"People use Red Hat, at least with respect to our intellectual property, in a sense have an obligation to eventually compensate us," Ballmer said at a company event last week in London.
A video of Ballmer's speech appeared this week on a Microsoft U.K. Web site.
Microsoft has long claimed that Linux and other open source software programs violate its patents. Last year, the company struck a deal with Linux distributor Novell under which it indemnified Novell Linux users from any legal claims. In return, Microsoft gained the right to re-sell certificates for Novell's SUSE Linux at a mark-up.
Last week, Ballmer implied that users of Linux distributions from vendors other than those with which it has patent deals -- the list also includes Xandros and Linspire -- could be hearing from Microsoft. "We've spent a lot of money licensing patents," Ballmer said.
Ballmer said Microsoft would like to create "an intellectual property framework" that bridges the commercial software and open source worlds so that users know where they stand with regards to using certain software programs.
He may not get much cooperation from the open source community, however. Linux advocates insist that the open source OS does not step on Microsoft's intellectual property and have publicly challenged the company to specify exactly which patents it believes have been violated.
Microsoft has thus far declined to do so.
Waqas Ahmed
http://www.teethree.com
"People use Red Hat, at least with respect to our intellectual property, in a sense have an obligation to eventually compensate us," Ballmer said at a company event last week in London.
A video of Ballmer's speech appeared this week on a Microsoft U.K. Web site.
Microsoft has long claimed that Linux and other open source software programs violate its patents. Last year, the company struck a deal with Linux distributor Novell under which it indemnified Novell Linux users from any legal claims. In return, Microsoft gained the right to re-sell certificates for Novell's SUSE Linux at a mark-up.
Last week, Ballmer implied that users of Linux distributions from vendors other than those with which it has patent deals -- the list also includes Xandros and Linspire -- could be hearing from Microsoft. "We've spent a lot of money licensing patents," Ballmer said.
Ballmer said Microsoft would like to create "an intellectual property framework" that bridges the commercial software and open source worlds so that users know where they stand with regards to using certain software programs.
He may not get much cooperation from the open source community, however. Linux advocates insist that the open source OS does not step on Microsoft's intellectual property and have publicly challenged the company to specify exactly which patents it believes have been violated.
Microsoft has thus far declined to do so.
Waqas Ahmed
http://www.teethree.com
Google And IBM Partner To Push Cloud Computing
Google and IBM on Monday announced an initiative to advance large-scale distributed computing by providing hardware, software, and services to universities.
The two companies aim to reduce the cost of distributed computing research, thereby enabling academic institutions and their students to more easily contribute to this emerging computing paradigm.
"Google is excited to partner with IBM to provide resources which will better equip students and researchers to address today's developing computational challenges," said Eric Schmidt, CEO of Google, in a statement. "In order to most effectively serve the long-term interests of our users, it is imperative that students are adequately equipped to harness the potential of modern computing systems and for researchers to be able to innovate ways to address emerging problems."
The first university to join the initiative is the University of Washington, located not far from Microsoft's corporate headquarters in Redmond, Wash. Carnegie-Mellon University, MIT, Stanford University, the University of California at Berkeley, and the University of Maryland are also participating in the program.
"The reason that we're partnering with universities is that Google is an engineering firm," said Christophe Bisciglia, a senior engineer at Google and a former University of Washington student. "We're working with our academic partners to teach [large-scale distributed computing] to students."
The fundamental architecture of computing is changing, Bisciglia said. Moore's Law still applies, he said, but now more performance gains come from processor density than transistor density. "You need to design your software to that it scales horizontally," he said, referring to the challenges of programming for many multicore processors working in parallel.
"In this age of 'Internet-scale' computing, the new, evolving problems faced by computer science students and researchers require a new, evolving set of skills," Bisciglia explained in a post to Google's corporate blog on Monday. "It's no longer enough to program one machine well; to tackle tomorrow's challenges, students need to be able to program thousands of machines to manage massive amounts of data in the blink of an eye."
"This is really going to benefit every entity that goes on to take these students," said Bisciglia. "They're all going to benefit from this change. They're all going to need it sooner or later."
Large-scale distributed computing, also known as cloud computing, has been touted as the future for years now. In a July 2003 paper, Microsoft researcher Jim Gray -- who was reported missing at sea earlier this year -- noted that IBM and Microsoft were pushing Internet-scale distributed computing as a new model.
Sun Microsystems has also long been an advocate of what it calls grid computing.
In a statement, Samuel J. Palmisano, chairman, president, and CEO of IBM, characterized the effort "to train tomorrow's programmers to write software that can support a tidal wave of global Web growth and trillions of secure transactions every day."
Whether IBM and Sun will develop an ad-based revenue stream to support large-scale distributed computing remains to be seen. Unlike Microsoft, neither company has hedged its business model by investing in Internet advertising technology.
As part of the initiative, Google and IBM are providing a cluster of several hundred computers -- Google's custom servers and IBM BladeCenter and System x servers. Over time, the companies expect the cluster to surpass 1,600 processors. The Linux-based servers will run open source software including Xen's virtualization system and Hadoop, an open source implementation of Google's distributed file system that's managed by the Apache Software Foundation.
Although Hadoop was developed by Yahoo's Doug Cutting and can be seen as enabling Google's competitors, Google says it supports the effort. "We're made very small contributions to Hadoop for this project and we obviously very strongly support the project," said Bisciglia.
IBM's Tivoli software will handle cluster management, monitoring, and resource provisioning.
Students working with the cluster will have access to a Creative Commons-licensed curriculum for massively parallel computing developed by Google and the University of Washington.
Waqas Ahmed
http://www.teethree.com
The two companies aim to reduce the cost of distributed computing research, thereby enabling academic institutions and their students to more easily contribute to this emerging computing paradigm.
"Google is excited to partner with IBM to provide resources which will better equip students and researchers to address today's developing computational challenges," said Eric Schmidt, CEO of Google, in a statement. "In order to most effectively serve the long-term interests of our users, it is imperative that students are adequately equipped to harness the potential of modern computing systems and for researchers to be able to innovate ways to address emerging problems."
The first university to join the initiative is the University of Washington, located not far from Microsoft's corporate headquarters in Redmond, Wash. Carnegie-Mellon University, MIT, Stanford University, the University of California at Berkeley, and the University of Maryland are also participating in the program.
"The reason that we're partnering with universities is that Google is an engineering firm," said Christophe Bisciglia, a senior engineer at Google and a former University of Washington student. "We're working with our academic partners to teach [large-scale distributed computing] to students."
The fundamental architecture of computing is changing, Bisciglia said. Moore's Law still applies, he said, but now more performance gains come from processor density than transistor density. "You need to design your software to that it scales horizontally," he said, referring to the challenges of programming for many multicore processors working in parallel.
"In this age of 'Internet-scale' computing, the new, evolving problems faced by computer science students and researchers require a new, evolving set of skills," Bisciglia explained in a post to Google's corporate blog on Monday. "It's no longer enough to program one machine well; to tackle tomorrow's challenges, students need to be able to program thousands of machines to manage massive amounts of data in the blink of an eye."
"This is really going to benefit every entity that goes on to take these students," said Bisciglia. "They're all going to benefit from this change. They're all going to need it sooner or later."
Large-scale distributed computing, also known as cloud computing, has been touted as the future for years now. In a July 2003 paper, Microsoft researcher Jim Gray -- who was reported missing at sea earlier this year -- noted that IBM and Microsoft were pushing Internet-scale distributed computing as a new model.
Sun Microsystems has also long been an advocate of what it calls grid computing.
In a statement, Samuel J. Palmisano, chairman, president, and CEO of IBM, characterized the effort "to train tomorrow's programmers to write software that can support a tidal wave of global Web growth and trillions of secure transactions every day."
Whether IBM and Sun will develop an ad-based revenue stream to support large-scale distributed computing remains to be seen. Unlike Microsoft, neither company has hedged its business model by investing in Internet advertising technology.
As part of the initiative, Google and IBM are providing a cluster of several hundred computers -- Google's custom servers and IBM BladeCenter and System x servers. Over time, the companies expect the cluster to surpass 1,600 processors. The Linux-based servers will run open source software including Xen's virtualization system and Hadoop, an open source implementation of Google's distributed file system that's managed by the Apache Software Foundation.
Although Hadoop was developed by Yahoo's Doug Cutting and can be seen as enabling Google's competitors, Google says it supports the effort. "We're made very small contributions to Hadoop for this project and we obviously very strongly support the project," said Bisciglia.
IBM's Tivoli software will handle cluster management, monitoring, and resource provisioning.
Students working with the cluster will have access to a Creative Commons-licensed curriculum for massively parallel computing developed by Google and the University of Washington.
Waqas Ahmed
http://www.teethree.com
Sunday, September 9, 2007
Pakistan: Better Late Than Never In Outsourcing
Think software and services outsourcing, and places like Bangalore, Manila, and perhaps Budapest spring to mind. But Lahore or Karachi? The Pakistani cities might not be on the outsourcing map yet, but the country's software shops are out to change that. "As a natural course, American companies would not look at Pakistan," acknowledges Jehan Ara, president of the 250-member Pakistan Software Houses Assn. "So we have to get them to look at us, and once they do business with us and credibility is established, they come back for more."
It makes sense for Pakistan to follow in India's footsteps and try to boost its outsourcing business. The country, after all, shares India's British colonial history and has some 17 million English speakers. It has a huge community of émigrés with experience in technology. And like India, it has a culture that values education and hard work. Wages, meanwhile, stand at about the same level as in India, with call center workers earning about $12 per day and starting software engineers pulling in $5,000 or so annually.
Still, Pakistan remains far behind India. Last year the country's software and IT services business hit just $300 million, and exports made up only about 11% of that. India, by contrast, booked $12.8 billion in software and services exports in 2004. But the Pakistan Software Export Board, a federal body set up to promote outsourcing, forecasts that the business will grow by at least 45% annually in coming years. "Pakistan started late but now is catching up very fast in software development," says Prime Minister Shaukat Aziz.
Lower-level operations such as call centers are expected to grow even faster: Some 120 centers have opened in Pakistan in the past two years. Today they employ 3,500 people, and that number is expected to grow by 60% a year. Arwen Tech, a Karachi company that runs a 600-seat center, saw its sales double last year, to $10 million, serving clients such as Pakistan International Airlines and the local franchisee for KFC Corp. Now the company is building a 1,500-seat facility and hopes to boost revenues tenfold, to $100 million, in the next five years as it attracts more international clients.
Pakistan could use the boost that outsourcing provides. Unemployment is officially pegged at 8%, although in reality it's far higher than that, and the government is looking for ways to fuel economic growth. Pakistan needs technology to increase efficiency and productivity. And software exports will help the country move away from its reliance on textiles, which make up 65% of total exports.
YOUNG TECHIES
Still, Pakistan faces major hurdles. First, there's the question of security: Few Western execs are willing to entrust sensitive data to such a troubled country. And despite its 55 tech institutes, Pakistan may face a shortage of IT workers. About 75,000 people work in the sector today, and the government believes a further 7,000 will be needed each year to keep the industry growing at current rates. But the country's tech schools produce just 5,500 graduates a year -- and only about a fifth of those are competitive and well trained, the Software Export Board says.
The country is working to fix those problems. A new government commission aims to beef up education standards. Since 2001, Parliament has scrapped corporate taxes on software exports and simplified the investment process. In the next three years, the government also plans to open IT parks in Islamabad, Karachi, and Lahore. And the Pakistan Software Houses Assn. last year sent two delegations to India, then in February invited a group from Bangalore to Karachi and Lahore in an effort to learn from the Indian experience.
Outsourcing companies have developed their own strategies for beefing up their business. One is to look for customers in places other than the U.S., where Pakistan's image problems are most acute. In 1996, Lahore's NetSol Technologies Inc. won a contract from Mercedes-Benz Leasing Co. in Thailand to install a software program from Britain. Later the company developed its own package, which it went on to sell to DaimlerChrysler in nine Asian countries. The NASDAQ-listed company now has 270 employees and this year expects sales of $10 million. In April NetSol signed a $2.3 million deal with Toyota Motor Corp. and hopes to expand into Europe.
Karachi IT services firm System Innovations looked for work even closer to home. The company was conceived five years ago by Amer Hashmi, a six-year veteran of IBM's Global Services division in Toronto. The 34-year-old Hashmi saw an opportunity supplying software to state-owned Pakistani companies, and today counts the electric monopoly, Citibank's Pakistan operations, and Habib Bank Ltd. -- the country's second-largest -- among his 50 clients. Now, with 100 employees and $10 million in sales this year, Hashmi hopes to triple the company's size in the next 12 months by boosting sales to U.S. corporations. He plans to open offices in Texas and Ontario this summer.
Others have set up front offices in the U.S. to win customers. Lahore's Techlogix Pakistan, one of the country's first software exporters, gets 95% of its business from the U.S. Most of that comes in from a four-member sales team in Boston, which funnels work to 90 software developers in Pakistan and a further 35 in Beijing. The company booked $8.2 million in revenues in 2004 serving 18 clients, including General Electric Co. and Massachusetts Mutual Life Insurance Co. "Our U.S. office has to offer the same kind of relationship-management as top-notch U.S. companies," says Kewan Khawaja, co-CEO of Techlogix. It may be a while before Karachi or Lahore has the resonance of Bangalore or even Budapest. But plenty of ambitious Pakistanis are working to make it happen someday.
It makes sense for Pakistan to follow in India's footsteps and try to boost its outsourcing business. The country, after all, shares India's British colonial history and has some 17 million English speakers. It has a huge community of émigrés with experience in technology. And like India, it has a culture that values education and hard work. Wages, meanwhile, stand at about the same level as in India, with call center workers earning about $12 per day and starting software engineers pulling in $5,000 or so annually.
Still, Pakistan remains far behind India. Last year the country's software and IT services business hit just $300 million, and exports made up only about 11% of that. India, by contrast, booked $12.8 billion in software and services exports in 2004. But the Pakistan Software Export Board, a federal body set up to promote outsourcing, forecasts that the business will grow by at least 45% annually in coming years. "Pakistan started late but now is catching up very fast in software development," says Prime Minister Shaukat Aziz.
Lower-level operations such as call centers are expected to grow even faster: Some 120 centers have opened in Pakistan in the past two years. Today they employ 3,500 people, and that number is expected to grow by 60% a year. Arwen Tech, a Karachi company that runs a 600-seat center, saw its sales double last year, to $10 million, serving clients such as Pakistan International Airlines and the local franchisee for KFC Corp. Now the company is building a 1,500-seat facility and hopes to boost revenues tenfold, to $100 million, in the next five years as it attracts more international clients.
Pakistan could use the boost that outsourcing provides. Unemployment is officially pegged at 8%, although in reality it's far higher than that, and the government is looking for ways to fuel economic growth. Pakistan needs technology to increase efficiency and productivity. And software exports will help the country move away from its reliance on textiles, which make up 65% of total exports.
YOUNG TECHIES
Still, Pakistan faces major hurdles. First, there's the question of security: Few Western execs are willing to entrust sensitive data to such a troubled country. And despite its 55 tech institutes, Pakistan may face a shortage of IT workers. About 75,000 people work in the sector today, and the government believes a further 7,000 will be needed each year to keep the industry growing at current rates. But the country's tech schools produce just 5,500 graduates a year -- and only about a fifth of those are competitive and well trained, the Software Export Board says.
The country is working to fix those problems. A new government commission aims to beef up education standards. Since 2001, Parliament has scrapped corporate taxes on software exports and simplified the investment process. In the next three years, the government also plans to open IT parks in Islamabad, Karachi, and Lahore. And the Pakistan Software Houses Assn. last year sent two delegations to India, then in February invited a group from Bangalore to Karachi and Lahore in an effort to learn from the Indian experience.
Outsourcing companies have developed their own strategies for beefing up their business. One is to look for customers in places other than the U.S., where Pakistan's image problems are most acute. In 1996, Lahore's NetSol Technologies Inc. won a contract from Mercedes-Benz Leasing Co. in Thailand to install a software program from Britain. Later the company developed its own package, which it went on to sell to DaimlerChrysler in nine Asian countries. The NASDAQ-listed company now has 270 employees and this year expects sales of $10 million. In April NetSol signed a $2.3 million deal with Toyota Motor Corp. and hopes to expand into Europe.
Karachi IT services firm System Innovations looked for work even closer to home. The company was conceived five years ago by Amer Hashmi, a six-year veteran of IBM's Global Services division in Toronto. The 34-year-old Hashmi saw an opportunity supplying software to state-owned Pakistani companies, and today counts the electric monopoly, Citibank's Pakistan operations, and Habib Bank Ltd. -- the country's second-largest -- among his 50 clients. Now, with 100 employees and $10 million in sales this year, Hashmi hopes to triple the company's size in the next 12 months by boosting sales to U.S. corporations. He plans to open offices in Texas and Ontario this summer.
Others have set up front offices in the U.S. to win customers. Lahore's Techlogix Pakistan, one of the country's first software exporters, gets 95% of its business from the U.S. Most of that comes in from a four-member sales team in Boston, which funnels work to 90 software developers in Pakistan and a further 35 in Beijing. The company booked $8.2 million in revenues in 2004 serving 18 clients, including General Electric Co. and Massachusetts Mutual Life Insurance Co. "Our U.S. office has to offer the same kind of relationship-management as top-notch U.S. companies," says Kewan Khawaja, co-CEO of Techlogix. It may be a while before Karachi or Lahore has the resonance of Bangalore or even Budapest. But plenty of ambitious Pakistanis are working to make it happen someday.
Waqas Ahmed
Founder & CEO
TeeThree
http://www.teethree.com
Tuesday, August 28, 2007
The Right Way to Use Web 2.0
Entrepreneurs are eager to use the rapidly emerging social networks and blogging tools to get closer to their customers, but first they need to develop a business strategy, according to members of a high-profile panel in a recent discussion at the MIT Enterprise Forum of the Northwest. Panelists included representatives of Technorati, Facebook, and Wetpaint, who offered the following suggestions for best using Web 2.0 techniques:
• Define the business goals your business can achieve by creating a community. One panelist described how Victoria's Secret created a Facebook community around "Pink," a line of sweat suits, before the line was even launched. The company successfully used "a two-way dialogue" to build up advance sales for the new product.
• Don't automatically give up on old marketing techniques in favor of Web 2.0. One panelist asked the audience how many have bought products based on TV advertising vs. Web advertising, and the TV side won out by a large margin. "People are sometimes too willing to abandon" tried-and-true marketing tools, noted a panelist.
• Go beyond starting a conversation with customers. While getting people talking is a good start, "You have to listen to people when they come" to a blog, noted a panelist. Because people tend to trust their own personal social networks more than any particular company, entrepreneurs must demonstrate their organizations are worthy of trust by applying feedback to their offerings.
Opinions Divided on Linkedin for Entreprenuers
The networking site gets mixed reviews in a discussion on the Harvard Startups listserv.
One entrepreneur reports he is down on LinkedIn because "it depends on all its members responding to messages when one member wants to contact another beyond their immediate network.… In every case where I tried to contact someone two networks away, I found the gatekeepers asleep, so my messages were never passed along."
Another says he finds it "to be very static. The network's in place, but I'm not doing anything with it, partly because I'm not sure how to use it well.… I like having other people I respect in mine in the hopes that they will 'meet' each other, but that doesn't seem to be happening either."
Others say they've had the opposite experience. "As your network grows, the number of gatekeepers available to a given contact grows as well. Perhaps I have just been lucky, but the ones I asked to pass on a referral have been prompt and helpful." The head of a startup says he uses LinkedIn "almost daily. Anything from finding valuable information about a prospect…to finding the next employee, finding contacts in a particular industry, geography, and much more."
Must Social-Entrepreneurship Ventures Be Nonprofit?
Not necessarily, argue two Spanish researchers in a paper published in the Journal of World Business. Analysis of three success stories—a bank in Bangladesh, a hospital in India, and an educational organization in Egypt—"reveals a common feature: All three creatively combine resources…to address a social problem and thereby alter existing social structures," write Johanna Mair and Ignasi Marti of IESE Business School at the University of Navarra. The Bangladesh and Egyptian organizations "fit perfectly with a for-profit scheme," they maintain. "In sum, whether social entrepreneurs choose a nonprofit or a for-profit vehicle often depends on the particular business model and the specific social needs addressed."
More Early-Stage Businesses Leverage Emerging Economies
Consulting firm MasterPlans.com saw the percentage of inquiries for global businesses increase to 22% of the total, from 5% in the year-earlier period, according to the firm's chief executive officer, Bryan Howe. Examples include not just outsourcing computer programming to India and targeting suppliers in Mexico, but developing condominiums in Montenegro for wealthy Russians and selling agricultural technology to Tanzania.
Waqas Ahmed
Founder & CEO
TeeThree
http://www.teethree.com
Outsourcing With Confidence
Call it the low-cost labor chase. Fed up with Bangalore's swiftly rising costs, high turnover, and overstretched infrastructure, companies are looking to send IT operations to other cities. Need some inexpensive tech support? Check out Ho Chi Minh City. Want to develop a security system? Take a look at Bucharest.
But be warned. The labor may be cheap, but the risks can be high. Companies that shift work to developing countries have to be prepared to deal with language and cultural differences, potential political instability, and possibly even the theft of valuable intellectual property. Here’s a guide for going global.
DO
Take a trip Before you sign a contract, spend some time at the offshore outsourcing center, even if it's on the other side of the world. Many companies send business to centers overseas without ever visiting them.
Consider culture Offshore workers may speak your language, but they may not fit the company culture. Want programmers to challenge ideas and propose alternate courses of action at times? You may be better off in Moscow than Bangalore.
Look beyond the bottom line Many outsourcing deals are focused solely on cost but break down in the third year after every last penny has been squeezed out. Instead, consider what you'll need over a three- to five-year period and choose a vendor capable of innovating or making enhancements when the time comes.
Seek maturity The Software Engineering Institute rates the maturity of business processes of some offshore IT providers. Look for providers with CMMI (capability maturity model integration) Level 5, the highest possible rating.
DON'T
Forget about time If your employees will need to collaborate with workers in other countries, pick an offshore destination in a time zone that will allow some overlap of the workday.
Give it all away Not all work is appropriate to send offshore. For instance, some organizations that outsource entire help desks are starting to take back pieces that are especially complex.
Expect instant results There's an illusion that sending IT work offshore will immediately yield high productivity. Success takes time.
Pick the wrong partner Offshore providers often cater to specific countries. In China, for example, some providers have experience serving domestic clients, while others work primarily with U.S. and European companies.
Jump the gun If you're just beginning to send work offshore, consider a locale where providers have years of experience. Emerging destinations such as China or Vietnam offer lower costs but present bigger challenges.
Waqas Ahmed
Founder & CEO
TeeThree
http://www.teethree.com
But be warned. The labor may be cheap, but the risks can be high. Companies that shift work to developing countries have to be prepared to deal with language and cultural differences, potential political instability, and possibly even the theft of valuable intellectual property. Here’s a guide for going global.
DO
Take a trip Before you sign a contract, spend some time at the offshore outsourcing center, even if it's on the other side of the world. Many companies send business to centers overseas without ever visiting them.
Consider culture Offshore workers may speak your language, but they may not fit the company culture. Want programmers to challenge ideas and propose alternate courses of action at times? You may be better off in Moscow than Bangalore.
Look beyond the bottom line Many outsourcing deals are focused solely on cost but break down in the third year after every last penny has been squeezed out. Instead, consider what you'll need over a three- to five-year period and choose a vendor capable of innovating or making enhancements when the time comes.
Seek maturity The Software Engineering Institute rates the maturity of business processes of some offshore IT providers. Look for providers with CMMI (capability maturity model integration) Level 5, the highest possible rating.
DON'T
Forget about time If your employees will need to collaborate with workers in other countries, pick an offshore destination in a time zone that will allow some overlap of the workday.
Give it all away Not all work is appropriate to send offshore. For instance, some organizations that outsource entire help desks are starting to take back pieces that are especially complex.
Expect instant results There's an illusion that sending IT work offshore will immediately yield high productivity. Success takes time.
Pick the wrong partner Offshore providers often cater to specific countries. In China, for example, some providers have experience serving domestic clients, while others work primarily with U.S. and European companies.
Jump the gun If you're just beginning to send work offshore, consider a locale where providers have years of experience. Emerging destinations such as China or Vietnam offer lower costs but present bigger challenges.
Waqas Ahmed
Founder & CEO
TeeThree
http://www.teethree.com
Monday, August 20, 2007
Artificial Intelligence Surpassing Human IQ
Many specialists in the field of Artificial Intelligence argue when is AI going to surpass human intelligence. Indeed, there is now an AI Checker Playing system that can play a perfect game of checkers, we know that IBM built a Chess playing machine that beat a top human chess player, thus some say that AI has already surpassed human intelligence.
Of course those are just games and a human mind is capable of multiple intelligences, so when will an AI machine be as smart as the World's Smartest human? Well, this question has been posed and most AI scientists believe it will come around 2020 or 2030. I completely disagree, why you ask?
Well, you know there sure seem to countless pessimists in the ranks of AI niche scientists, in fact it seems that many humans do not achieve what they seek due to this negative feedback. So we really need Artificial Intelligence to design an artificial intelligent system that can surpass all the humans, who are stuck in linear thought convincing themselves that it cannot be done until a prescribed date.
Who can tell us why everyone is convincing everyone else it cannot be done for 2 decades, why? Just because someone says it cannot be done does not mean it is so. When they say such things it only means that they believe they cannot do it in less time and if they believe that, then they are right, but for others to adopt such a line of reasoning simply does not follow any sort of real logic.
Therefore those who cannot think logically, well why are they in the field of AI which combines various human thought processes with machines of logic? Let's say the upper end human IQ is no more than 210, which really is not that high when you think about it, why couldn't we develop a system that mimics human thought processes using many combinations of strategies, why is everyone so adamant about their specific methods, which often can only attain a certain level presently.
Having had many original thoughts on the subject that I have not seen in any research papers, it appears to me that we are about a "half a break thru" from cracking the whole thing right now, not in 20 years. It could come at any time, the sooner the better.
The entire subject is interesting really. Those who predict such a long-term point of singularity almost seem to be promoting job security. Twenty years is not good enough, that is unacceptable. We should not promote weakness, laziness, defeatism or attempt to convince ourselves we cannot do something until some far off date when half these niche scientists maybe dead by then? It is time to bring Artificial Intelligent to the forefront now, not in 2-decades. Think on it.
Waqas Ahmed
Founder & CEO
TeeThree
http://www.teethree.com
Of course those are just games and a human mind is capable of multiple intelligences, so when will an AI machine be as smart as the World's Smartest human? Well, this question has been posed and most AI scientists believe it will come around 2020 or 2030. I completely disagree, why you ask?
Well, you know there sure seem to countless pessimists in the ranks of AI niche scientists, in fact it seems that many humans do not achieve what they seek due to this negative feedback. So we really need Artificial Intelligence to design an artificial intelligent system that can surpass all the humans, who are stuck in linear thought convincing themselves that it cannot be done until a prescribed date.
Who can tell us why everyone is convincing everyone else it cannot be done for 2 decades, why? Just because someone says it cannot be done does not mean it is so. When they say such things it only means that they believe they cannot do it in less time and if they believe that, then they are right, but for others to adopt such a line of reasoning simply does not follow any sort of real logic.
Therefore those who cannot think logically, well why are they in the field of AI which combines various human thought processes with machines of logic? Let's say the upper end human IQ is no more than 210, which really is not that high when you think about it, why couldn't we develop a system that mimics human thought processes using many combinations of strategies, why is everyone so adamant about their specific methods, which often can only attain a certain level presently.
Having had many original thoughts on the subject that I have not seen in any research papers, it appears to me that we are about a "half a break thru" from cracking the whole thing right now, not in 20 years. It could come at any time, the sooner the better.
The entire subject is interesting really. Those who predict such a long-term point of singularity almost seem to be promoting job security. Twenty years is not good enough, that is unacceptable. We should not promote weakness, laziness, defeatism or attempt to convince ourselves we cannot do something until some far off date when half these niche scientists maybe dead by then? It is time to bring Artificial Intelligent to the forefront now, not in 2-decades. Think on it.
Waqas Ahmed
Founder & CEO
TeeThree
http://www.teethree.com
Friday, August 17, 2007
IP and its value for Pakistan
IP? What is IP supposed to be? Is this the IP address we use to access our Internet Service Provider’s FTP servers? Does it mean Inspector Police?!
These are some of the obvious questions the educated lot from almost every industry and business community would ask when requested to describe IP. The dearth of knowledge surrounding this essential economic growth component contributes to its violation and a whole lot of other evils that:
1) Eliminate chances and opportunities for creative entrepreneurship.
2) Eliminate the already diminishing notion of research and development.
3) Keep investors at bay from potential long term investment.
4) Give the world the wrong signals about Pakistani business practice
Our government claims that the growth of the IT and Telecom sector in Pakistan has been due to consistent “economic” reforms. It looks more so to be due to the efforts of the entrepreneurs who have played catch up with other economies of the world, and managed somehow to carve a niche place for themselves in the market, battling every possible business scenario.
The reality is that the “real” efforts have done little to warrant any macro economic stability in a sector that is ripe with potential, but still falls behind in its efforts to attract local as well as foreign investment. The main reason for this is cited to be the absence of any IP rights enforcement, protection, and policing.
Contributing to this is also the national phenomenon of endorsing the “copycat” regime of the Rainbow Centers in Karachi, to the Bara in Peshawar. Consumer attitudes towards these rampant forms of copyrights and IPR infringement and blatant forms of piracy are so friendly to this culture, that it would need major awareness campaigns as well as active involvement of key players in the global market to bring about a change.
What is IP? IP is an acronym for Intellectual Property, which can be anything from a particular manufacturing process to a design for a product launch, a chemical formula or any other intangible proprietary information relating to countries in which it is registered and protected.
The formal definition, according to the World Intellectual Property Organization is creations of the mind - inventions, literary and artistic works, symbols, names, images, and designs used in commerce. IP encompasses but is not limited to proprietary formulas and ideas, inventions (products and processes), industrial designs, and geographic indications of source, as well as literary and artistic works such as novels, films, music, architectural designs and web pages.
Waqas Ahmed
Founder & CEO
http://www.teethree.com
These are some of the obvious questions the educated lot from almost every industry and business community would ask when requested to describe IP. The dearth of knowledge surrounding this essential economic growth component contributes to its violation and a whole lot of other evils that:
1) Eliminate chances and opportunities for creative entrepreneurship.
2) Eliminate the already diminishing notion of research and development.
3) Keep investors at bay from potential long term investment.
4) Give the world the wrong signals about Pakistani business practice
Our government claims that the growth of the IT and Telecom sector in Pakistan has been due to consistent “economic” reforms. It looks more so to be due to the efforts of the entrepreneurs who have played catch up with other economies of the world, and managed somehow to carve a niche place for themselves in the market, battling every possible business scenario.
The reality is that the “real” efforts have done little to warrant any macro economic stability in a sector that is ripe with potential, but still falls behind in its efforts to attract local as well as foreign investment. The main reason for this is cited to be the absence of any IP rights enforcement, protection, and policing.
Contributing to this is also the national phenomenon of endorsing the “copycat” regime of the Rainbow Centers in Karachi, to the Bara in Peshawar. Consumer attitudes towards these rampant forms of copyrights and IPR infringement and blatant forms of piracy are so friendly to this culture, that it would need major awareness campaigns as well as active involvement of key players in the global market to bring about a change.
What is IP? IP is an acronym for Intellectual Property, which can be anything from a particular manufacturing process to a design for a product launch, a chemical formula or any other intangible proprietary information relating to countries in which it is registered and protected.
The formal definition, according to the World Intellectual Property Organization is creations of the mind - inventions, literary and artistic works, symbols, names, images, and designs used in commerce. IP encompasses but is not limited to proprietary formulas and ideas, inventions (products and processes), industrial designs, and geographic indications of source, as well as literary and artistic works such as novels, films, music, architectural designs and web pages.
Waqas Ahmed
Founder & CEO
http://www.teethree.com
WiMax launching : Pakistan ahead of USA and Europe!
It's not every day or even every month that you can get a news item that a South Asian country is ahead of USA and Europe in something. If it is related to the field of technology then surely you would relish it more. So, naturally, the news that Pakistan is ahead of USA and UK in launching WiMax. WiMax is a super-fast wireless technology related to mobile phone and WiFi users. Motorola is providing Wateen Telecom 802.16e WiMAX solution for nationwide network deployment in Pakistan. This will ensure better service for mobile phone users as well broadband internet users.
Pakistan government and private companies are very aggressively pushing for development in the technology sector and that is why Pakistan is going to launch WiMax technology. Well, Motorola bosses have realized the potential market opportunities for WiMax in South Asia and that is why Motorola is joining hands with the Indian government for the setting up of a WiMax development center in Chennai in which Motorola will invest $100 million. I do not know why international tech companies are yet to realize the opportunity of Bangladesh in wireless network. Bangladesh is one of the most densely populated countries in the world and WiMax will surely help a lot of people here.
Waqas Ahmed
Founder & CEO
http://www.teethree.com
Pakistan government and private companies are very aggressively pushing for development in the technology sector and that is why Pakistan is going to launch WiMax technology. Well, Motorola bosses have realized the potential market opportunities for WiMax in South Asia and that is why Motorola is joining hands with the Indian government for the setting up of a WiMax development center in Chennai in which Motorola will invest $100 million. I do not know why international tech companies are yet to realize the opportunity of Bangladesh in wireless network. Bangladesh is one of the most densely populated countries in the world and WiMax will surely help a lot of people here.
Waqas Ahmed
Founder & CEO
http://www.teethree.com
Thursday, August 16, 2007
Outsourcing: Beyond Bangalore
After 10 months of working with software developers in Bangalore, India, Bill Wood was ready to call it quits. The local engineers would start a project, get a few months' experience, and then bolt for greener pastures, says the U.S.-based executive. Attrition rose to such a high level that year that Wood's company had to replace its entire staff, some positions more than once. "It did not work well at all," recalls Wood, vice-president of engineering at Ping Identity, a maker of Internet security software for corporations. Frustrated, Wood began searching for a partner outside India. He scoured 15 companies in 8 different countries, including Russia, Mexico, Argentina, and Vietnam.
That path is being trod by a lot of executives, eager for new sources of low-cost, high-tech talent outside India. Many are fed up with the outsourcing hub of Bangalore, where salaries for info tech staff are growing at 12% to 14% a year, turnover is increasing, and an influx of workers is straining city resources. Even Indian outsourcing pioneers Tata Consultancy Services, Wipro Technologies, and Infosys Technologies, which have helped foreign companies shift software development and other IT operations to Bangalore, are starting to expand into smaller Indian cities, as well as China. "Overall, in terms of productivity and quality of life, beyond Bangalore is better," says Wipro Chief Information Officer Laxman Badiga. "Bangalore is getting more crowded, and the real infrastructure is getting stretched."
So companies are setting their sights on a slew of emerging hot spots for IT outsourcing. Need a multilingual workforce adept at developing security systems and testing software? Buna ziua, Bucharest. Want low-cost Linux developers? Bienvenidos a Buenos Aires, where many companies adopted open-source software after the devaluation of the peso in 2002 made licenses from abroad prohibitively expensive. Other cities on the list include Moscow and St. Petersburg in Russia and Prague in the Czech Republic, according to consulting firm neoIT. Other hot spots include Mexico City, São Paulo, and Santiago in Latin America; and within Asia, Dalian, China, and Ho Chi Minh City, Vietnam.
The Search for Lower Costs
Make no mistake: India remains an IT outsourcing powerhouse, with $17.7 billion in software and IT services exports in 2005, compared with $3.6 billion for China and $1 billion for Russia, according to trade organizations in each country. And India's outsourcing industry is still growing at a faster pace than that of Russia and other wannabe Bangalores.
Yet many companies can't resist the lure of cheaper labor. "Ninety percent of all outsourcing deals in the market today have been structured around cost improvement only," says Linda Cohen, vice-president of sourcing research at consulting firm Gartner (IT). By the third year of an outsourcing deal, after all the costs have been squeezed out, companies get antsy to find a new locale with an even lower overhead.
But moving IT operations into developing countries like Vietnam or China can also pose big risks, such as insurmountable language and cultural differences, geopolitical instability, and the risk of stolen intellectual property. "You keep following the money, but how often are you going to move people around?" asks Cohen. Even the routine day-to-day management of an offshore team can require significant project management expertise. "If you don't have experience and don't do it well, it can negate savings," says Barry Rubenstein, program manager of application outsourcing and offshore services at IDC.
Mix of Outsourcing Locations
Plenty of providers are ready to help clients overcome those obstacles. Companies including Accenture, EDS, IBM Global Services , and Genpact are building global networks, comprised of operations in a variety of cities, aimed at giving customers a mix of worker skills and labor costs. "We tailor where you want your people, based on the premium you want to pay," says Charlie Feld, executive vice-president of portfolio development at EDS.
Continental Airlines, for instance, uses an EDS center in India for development of some software that runs on mainframes, but the airline handles some finance work through an EDS office in Brazil. Accenture uses its global network of facilities in a similar fashion. "Today we are about 35% in high-cost locations, such as the U.S. and Britain; 20% in medium-cost locations like Spain, Ireland, and Canada; and about 45% in low-cost locations like the Philippines, India, China, and Eastern Europe," says Jimmy Harris, global managing director of infrastructure outsourcing at Accenture.
When Bob Gett, CEO of Boston systems integration firm Optaros, decided to hire an overseas outfit to handle development of some applications or programs designed to perform specific tasks, he scouted out six or seven countries in Eastern Europe. He finally settled on Akela, an outsourcing company in Bucharest, Romania. Gett found Romania attractive because of its good education system, multilingual population, and abundance of technical talent.
Benefiting from Geography
The move reduces costs by 60% to 75%, Gett figures, letting Optaros offer competitive pricing to customers. "We're going to where the most cost-effective talent is in the world, but it has to be feasible," he says. "It can't be where there are economic, time zone, or language barriers." In fact, Gett needs his application developers to interact directly with customers in the U.S. and Western Europe, so he appreciates that Akela workers speak English and French and are closer to the Optaros Geneva office than workers in India would be.
Companies such as Genpact, Accenture, Wipro, and Infosys are hoping Romania's expected admission to the European Union will make it even more appealing for companies from Western Europe to do business there.
Dalian, a seaport in northeast China, is also turning out to be an ideal center for outsourcing, in large part because of its geography and history. Located in the northeast corner of China, Dalian is close to both Korea and Japan and was, in the first half of the 20th century, occupied by Japan. So there's still a labor pool of Japanese speakers.
Intellectual Property Issues
Dalian's labor costs are lower than in Japan, so it's become a center for application development for Japanese companies. U.S. firms outsource some technology work there as well. General Electric and Nissan outsource work to Genpact's operations in Dalian. Genpact was the first outsourcing firm to locate in the city in June, 2000. Accenture and IBM Global Services have since moved in.
There are certainly challenges for companies that wish to outsource to China, including the potential theft of intellectual property. To combat this, Infosys Technologies has disabled USB drives on PCs to limit the ability of workers to take data out of the office. "We've taken extraordinary efforts to protect the intellectual property of our clients," says Stephen Pratt, CEO Infosys Consulting, a subsidiary of Infosys Technologies, which has operations in Shanghai.
For U.S. companies that need to collaborate closely with offshore workers, South America is an attractive option because the time zones are similar and the infrastructure is strong.
Infrastructure Counts
Brazil boasts a mature software and IT industry, and the nation's providers such as Politec, Stefanini IT, and ActMinds are keen to do more offshore business. Stefanini, which has served clients such as Whirlpool and Johnson & Johnson, derives about 20% of its revenue from international operations, but the company would like to expand that to 50% by 2008.
Total Brazilian software and IT services revenue is $17.16 billion, while revenue from offshore software development is a much smaller $205.3 million, according to Brazil IT, an association of Brazilian IT services providers. "If we can get a client interested enough that they will go to Brazil, they will do business with us," says Eric Olsson, principal consultant with Politec, which has done work for clients such as insurer MetLife, software colossus Microsoft, and SAIC, a provider of a host of scientific and engineering services. Companies are drawn to Brazil's modern infrastructure, with airports and highways that are first world, says Olsson, whose company is the largest IT services provider in Brazil.
Good roads and the developers who drive on them don't come cheap, though. A software engineer in Brazil costs $20 to $35 per hour. That's lower than in the U.S. but pricier than in India.
Threat to U.S. Workers
And while a technically skilled global labor force is a boon to companies, the picture isn't so rosy for U.S. workers. Instead of competing with just India, now U.S. IT workers will need to go up against workers all over the world. In 2005, about 24% of North American companies used offshore providers to meet some of their software needs, according to Forrester Research. Over the next five years, spending on offshore IT services is set to increase at a compound annual growth rate of 18%, according to IDC.
The effect in the U.S. is that starting salaries in the engineering field—when adjusted for inflation—have stayed constant or decreased in the past five years or so, says Vivek Wadhwa, executive in residence at Duke University. "It doesn't make much sense to get into programming anymore," says Wadhwa, who worries that a lack of talent in certain industries, such as telecom, along with the outsourcing of research and development will erode U.S. competitiveness. But U.S. companies say that hiring programmers in India, who might make a fifth of what programmers do in the U.S., allows the companies to survive in a globally competitive economy.
After traveling the world, Ping Identity's Wood finally settled on Luxoft, an outsourcing provider based in Moscow that has served high-profile clients such as Boeing, Citigroup's Citibank, and Dell. While programmers are typically 20% more expensive in Moscow than in Bangalore, Wood found that there wasn't much difference in the hourly rate for the kind of work that he needed. "Indian companies are cheap until you ask for people with experience, and we wanted workers with eight years or more of experience," he says.
Russia's high-end software developers are drawing plenty of offshore business to Moscow and St. Petersburg, which together account for about 60% of the country's software development exports. Those exports have grown from $352 million in 2002 to nearly $1 billion in 2005, according to RUSSOFT, an association of software development firms from Russia, Belarus, and Ukraine. Providers EPAM and Luxoft are starting to gain some international recognition as well, both making Brown & Wilson's Top 50 Best Managed Global Outsourcing Vendors for the first time in 2006.
For Wood, the biggest benefit of working with Luxoft is a cultural one. "One of the reasons we're in Russia is that we found a common value set. Their work ethic is strong, and these people are very outspoken," says Wood. He says engineers in Moscow have no trouble proposing a different course of action when necessary. He says he found workers in Bangalore to be reticent. And since Russian developers stick around longer—turnover is now in the low teens—Wood has plenty of time to take those opinions to heart.
by Rachael King of BusinessWeek.com
Source (http://www.businessweek.com/technology/content/dec2006/tc20061207_164472.htm)
Waqas Ahmed
Founder & CEO
http://www.teethree.com/
That path is being trod by a lot of executives, eager for new sources of low-cost, high-tech talent outside India. Many are fed up with the outsourcing hub of Bangalore, where salaries for info tech staff are growing at 12% to 14% a year, turnover is increasing, and an influx of workers is straining city resources. Even Indian outsourcing pioneers Tata Consultancy Services, Wipro Technologies, and Infosys Technologies, which have helped foreign companies shift software development and other IT operations to Bangalore, are starting to expand into smaller Indian cities, as well as China. "Overall, in terms of productivity and quality of life, beyond Bangalore is better," says Wipro Chief Information Officer Laxman Badiga. "Bangalore is getting more crowded, and the real infrastructure is getting stretched."
So companies are setting their sights on a slew of emerging hot spots for IT outsourcing. Need a multilingual workforce adept at developing security systems and testing software? Buna ziua, Bucharest. Want low-cost Linux developers? Bienvenidos a Buenos Aires, where many companies adopted open-source software after the devaluation of the peso in 2002 made licenses from abroad prohibitively expensive. Other cities on the list include Moscow and St. Petersburg in Russia and Prague in the Czech Republic, according to consulting firm neoIT. Other hot spots include Mexico City, São Paulo, and Santiago in Latin America; and within Asia, Dalian, China, and Ho Chi Minh City, Vietnam.
The Search for Lower Costs
Make no mistake: India remains an IT outsourcing powerhouse, with $17.7 billion in software and IT services exports in 2005, compared with $3.6 billion for China and $1 billion for Russia, according to trade organizations in each country. And India's outsourcing industry is still growing at a faster pace than that of Russia and other wannabe Bangalores.
Yet many companies can't resist the lure of cheaper labor. "Ninety percent of all outsourcing deals in the market today have been structured around cost improvement only," says Linda Cohen, vice-president of sourcing research at consulting firm Gartner (IT). By the third year of an outsourcing deal, after all the costs have been squeezed out, companies get antsy to find a new locale with an even lower overhead.
But moving IT operations into developing countries like Vietnam or China can also pose big risks, such as insurmountable language and cultural differences, geopolitical instability, and the risk of stolen intellectual property. "You keep following the money, but how often are you going to move people around?" asks Cohen. Even the routine day-to-day management of an offshore team can require significant project management expertise. "If you don't have experience and don't do it well, it can negate savings," says Barry Rubenstein, program manager of application outsourcing and offshore services at IDC.
Mix of Outsourcing Locations
Plenty of providers are ready to help clients overcome those obstacles. Companies including Accenture, EDS, IBM Global Services , and Genpact are building global networks, comprised of operations in a variety of cities, aimed at giving customers a mix of worker skills and labor costs. "We tailor where you want your people, based on the premium you want to pay," says Charlie Feld, executive vice-president of portfolio development at EDS.
Continental Airlines, for instance, uses an EDS center in India for development of some software that runs on mainframes, but the airline handles some finance work through an EDS office in Brazil. Accenture uses its global network of facilities in a similar fashion. "Today we are about 35% in high-cost locations, such as the U.S. and Britain; 20% in medium-cost locations like Spain, Ireland, and Canada; and about 45% in low-cost locations like the Philippines, India, China, and Eastern Europe," says Jimmy Harris, global managing director of infrastructure outsourcing at Accenture.
When Bob Gett, CEO of Boston systems integration firm Optaros, decided to hire an overseas outfit to handle development of some applications or programs designed to perform specific tasks, he scouted out six or seven countries in Eastern Europe. He finally settled on Akela, an outsourcing company in Bucharest, Romania. Gett found Romania attractive because of its good education system, multilingual population, and abundance of technical talent.
Benefiting from Geography
The move reduces costs by 60% to 75%, Gett figures, letting Optaros offer competitive pricing to customers. "We're going to where the most cost-effective talent is in the world, but it has to be feasible," he says. "It can't be where there are economic, time zone, or language barriers." In fact, Gett needs his application developers to interact directly with customers in the U.S. and Western Europe, so he appreciates that Akela workers speak English and French and are closer to the Optaros Geneva office than workers in India would be.
Companies such as Genpact, Accenture, Wipro, and Infosys are hoping Romania's expected admission to the European Union will make it even more appealing for companies from Western Europe to do business there.
Dalian, a seaport in northeast China, is also turning out to be an ideal center for outsourcing, in large part because of its geography and history. Located in the northeast corner of China, Dalian is close to both Korea and Japan and was, in the first half of the 20th century, occupied by Japan. So there's still a labor pool of Japanese speakers.
Intellectual Property Issues
Dalian's labor costs are lower than in Japan, so it's become a center for application development for Japanese companies. U.S. firms outsource some technology work there as well. General Electric and Nissan outsource work to Genpact's operations in Dalian. Genpact was the first outsourcing firm to locate in the city in June, 2000. Accenture and IBM Global Services have since moved in.
There are certainly challenges for companies that wish to outsource to China, including the potential theft of intellectual property. To combat this, Infosys Technologies has disabled USB drives on PCs to limit the ability of workers to take data out of the office. "We've taken extraordinary efforts to protect the intellectual property of our clients," says Stephen Pratt, CEO Infosys Consulting, a subsidiary of Infosys Technologies, which has operations in Shanghai.
For U.S. companies that need to collaborate closely with offshore workers, South America is an attractive option because the time zones are similar and the infrastructure is strong.
Infrastructure Counts
Brazil boasts a mature software and IT industry, and the nation's providers such as Politec, Stefanini IT, and ActMinds are keen to do more offshore business. Stefanini, which has served clients such as Whirlpool and Johnson & Johnson, derives about 20% of its revenue from international operations, but the company would like to expand that to 50% by 2008.
Total Brazilian software and IT services revenue is $17.16 billion, while revenue from offshore software development is a much smaller $205.3 million, according to Brazil IT, an association of Brazilian IT services providers. "If we can get a client interested enough that they will go to Brazil, they will do business with us," says Eric Olsson, principal consultant with Politec, which has done work for clients such as insurer MetLife, software colossus Microsoft, and SAIC, a provider of a host of scientific and engineering services. Companies are drawn to Brazil's modern infrastructure, with airports and highways that are first world, says Olsson, whose company is the largest IT services provider in Brazil.
Good roads and the developers who drive on them don't come cheap, though. A software engineer in Brazil costs $20 to $35 per hour. That's lower than in the U.S. but pricier than in India.
Threat to U.S. Workers
And while a technically skilled global labor force is a boon to companies, the picture isn't so rosy for U.S. workers. Instead of competing with just India, now U.S. IT workers will need to go up against workers all over the world. In 2005, about 24% of North American companies used offshore providers to meet some of their software needs, according to Forrester Research. Over the next five years, spending on offshore IT services is set to increase at a compound annual growth rate of 18%, according to IDC.
The effect in the U.S. is that starting salaries in the engineering field—when adjusted for inflation—have stayed constant or decreased in the past five years or so, says Vivek Wadhwa, executive in residence at Duke University. "It doesn't make much sense to get into programming anymore," says Wadhwa, who worries that a lack of talent in certain industries, such as telecom, along with the outsourcing of research and development will erode U.S. competitiveness. But U.S. companies say that hiring programmers in India, who might make a fifth of what programmers do in the U.S., allows the companies to survive in a globally competitive economy.
After traveling the world, Ping Identity's Wood finally settled on Luxoft, an outsourcing provider based in Moscow that has served high-profile clients such as Boeing, Citigroup's Citibank, and Dell. While programmers are typically 20% more expensive in Moscow than in Bangalore, Wood found that there wasn't much difference in the hourly rate for the kind of work that he needed. "Indian companies are cheap until you ask for people with experience, and we wanted workers with eight years or more of experience," he says.
Russia's high-end software developers are drawing plenty of offshore business to Moscow and St. Petersburg, which together account for about 60% of the country's software development exports. Those exports have grown from $352 million in 2002 to nearly $1 billion in 2005, according to RUSSOFT, an association of software development firms from Russia, Belarus, and Ukraine. Providers EPAM and Luxoft are starting to gain some international recognition as well, both making Brown & Wilson's Top 50 Best Managed Global Outsourcing Vendors for the first time in 2006.
For Wood, the biggest benefit of working with Luxoft is a cultural one. "One of the reasons we're in Russia is that we found a common value set. Their work ethic is strong, and these people are very outspoken," says Wood. He says engineers in Moscow have no trouble proposing a different course of action when necessary. He says he found workers in Bangalore to be reticent. And since Russian developers stick around longer—turnover is now in the low teens—Wood has plenty of time to take those opinions to heart.
by Rachael King of BusinessWeek.com
Source (http://www.businessweek.com/technology/content/dec2006/tc20061207_164472.htm)
Waqas Ahmed
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